COMMONWEALTH of VIRGINIA
Department of Education
June 1, 2012
TO: Division Superintendents
FROM: Patricia I. Wright, Superintendent of Public Instruction
Pursuant to Chapter 2, 2012 Acts of Assembly, school divisions were required to report average daily membership (ADM) as of March 31, 2012, to the Department of Education. The data reported by divisions were used to recalculate all ADM-based state payments for fiscal year 2012. On a statewide basis, actual March 31, 2012, unadjusted ADM was 360.60 less than the projected unadjusted ADM on which the current state budget for fiscal year 2012 (Chapter 2, 2012 Acts of Assembly) is based. Consequently, school divisions will receive their full ADM-based general fund state payments for fiscal year 2012 with no changes other than the routine adjustments that are made to the Basic Aid payment for some divisions each year as described later in this memorandum. State Virginia Retirement System (VRS) payments are, in part, supported by the Literary Fund and are subject to the final deposit of actual Literary Fund revenues. In the event that actual Literary Fund revenue for fiscal year 2012 does not meet the estimate contained in Chapter 2, the VRS account may be prorated if other Direct Aid balances are not sufficient to make up any shortfall.
For accounts supported by the Lottery Proceeds Fund, those state payments are subject to the final deposit of actual Lottery proceeds for fiscal year 2012. In the event that actual Lottery revenue for fiscal year 2012 does not meet the estimate contained in Chapter 2, the Textbooks account in the Lottery Service Area will be prorated first to accommodate any shortfall, with additional accounts to follow if the shortfall exceeds the Lottery-funded appropriation for Textbooks. For more information about this proration, please review the section titled “Incentive, Categorical, and Lottery Funded Accounts” below. The semi-monthly Standards of Quality (SOQ), Incentive and Lottery account payments for fiscal year 2012 will be adjusted for actual March 31 ADM beginning with the June 16, 2012, electronic funds transfer (EFT).
The information in this memorandum contains the final state funding due to school divisions (as of the date of this memorandum) in fiscal year 2012 for ADM-based accounts. Also, where available, final payments are shown for other Direct Aid accounts that are not calculated based on ADM. Payments for some accounts that require school divisions to submit reimbursements have not been finalized for the year so the payment amounts shown are estimates only.
The Excel calculation file referenced in this memorandum shows state payments, required local effort for the SOQ accounts, and required local matches for Incentive and Lottery-funded accounts calculated based on actual March 31, 2012, ADM. The accounts affected by actual March 31, 2012, ADM appear in the Excel file in bold font. Please note that, unlike previous Excel calculation files for fiscal year 2012 provided by the Department, this file does not offer an option to change ADM for fiscal year 2012 since ADM is now final. The calculation template can be downloaded from the Department of Education Web site at:
For assistance downloading the Excel calculation template, please refer to the instructions available at the following link:
Attachment A to this memorandum shows the final fiscal year 2012 payments for each school division for the SOQ, Incentive and Lottery-funded accounts that are based on actual March 31, 2012, ADM. Also included in the calculation template are the routine adjustments to the fiscal year 2012 state Basic Aid payment amounts, which are explained in further detail below.
Please note the following when reviewing the data contained in the Excel file:
Adjustments to the Fiscal Year 2012 Basic Aid State Payment for Certain School Divisions
As in past years, the Department’s normal practice for making certain types of adjustments to school division payments is to adjust Basic Aid since it is the largest Direct Aid account. The appropriation act directs that adjustments for the local share of cost of educating students in mental health facilities or training centers operated by the Department of Behavioral Health and Developmental Services, and adjustments for divisions ineligible to receive Driver Education funds be made against a school division’s Basic Aid payment. Similar adjustments to Basic Aid are made for local tuition for students attending the Virginia School for the Deaf and the Blind. Consequently, various adjustments will be made to the fiscal year 2012 state Basic Aid payments for certain school divisions beginning with the June 16, 2012, EFT. Where applicable, these adjustments will reduce the fiscal year 2012 Basic Aid state payment made to school divisions. As noted above, the estimated adjustments to Basic Aid (as of the June 16, 2012, EFT) are shown in the sheet labeled “Adjustments to FY2012 Basic Aid.” Pursuant to Chapter 2, 2012 Acts of Assembly, the Basic Aid adjustments for fiscal year 2012 shown in the Excel file are as follows:
Reporting Basic Aid Adjustments on the 2011-2012 Annual School Report
In order to maintain proper accounting for adjustments made to Basic Aid state payments for payments made on behalf of school divisions (adjustments two through four above), it is necessary for each school division to report the full state payment or gross revenue of Basic Aid funds under revenue source code 240202 (Basic School Aid) on the 2011-2012 Annual School Report. To balance this gross Basic Aid revenue on the 2011-2012 Annual School Report, school divisions with adjustments for mental health facilities/training centers or the Virginia School for the Deaf and the Blind should report these adjustment amounts as expenditures in the Instruction Function (61000) and Object Code 3000 (Purchased Services), using the appropriate Program Codes.
For those divisions where the final Basic Aid payment was adjusted for non-eligibility for Driver Education funds in item one above, the amount of the overpayment will be deducted from your unadjusted or full Basic Aid state payment as shown in the Annual School Report. The reduced Basic Aid state payment amount will be shown on the “Revenues” worksheet under revenue source code 240202 on your Annual School Report. No further reporting action is required, since the adjusted Basic Aid state payment will show the reduction, but school divisions should make note of this adjustment and can reference Attachment B to this memorandum for further detail on the four adjustments to the fiscal year 2012 Basic Aid state payment.
Adjustment to Fiscal Year 2012 Basic Aid State Payment to Correct Textbooks Overpayment
Beginning with the January 16, 2012, Electronic Funds Transfer (EFT), payments made to school divisions for the Lottery portion of Textbooks (revenue source code 240214) did not account for the payments made from July to December, 2011. This action resulted in most school divisions receiving more in Textbook payments through the April 16, 2012, EFT than they were entitled to for the full fiscal year. In order to offset the overpayment in Textbooks, the Department charged the overpayments to Basic Aid, which results in lower Basic Aid payments for the remainder of fiscal year 2012, beginning with the April 30, 2012, EFT. The remaining payments for the Lottery portion of Textbooks will continue at the appropriate amount, adjusted for final ADM, for the remainder of the fiscal year.
If you have any questions concerning the information in this memorandum, please contact Kent Dickey, deputy superintendent for finance and operations, or budget office staff at (804) 225-2025.